Some comp plan changes are unforgivable

Published: Wed, 07/27/22

July 27, 2022

TOGETHER WITH

Welcome back. As we all melt into a puddle the second we step foot outside, we wanted to take a moment and remind you that for every person you get to sign up for this newsletter, we’ll send you free stuff – more details at the bottom of the email. In this week’s edition of The Quota, we’ll show you how Salesforce got so big, find out how many reps have been guilt-tripped by their manager, and give some advice to a medical device rep who’s worried about (shocker) changes to the comp plan. Let’s do this.

NUMBER OF THE WEEK

$10,000 - $15,000

Most companies will spend between $10,000 and $15,000 on hiring a single sales rep.

Source: ATD Research

SALES ROUNDUP

Here’s what’s happening in the sales world this week:

A customer celebrating buying her first car went viral after she was instructed to kick a gong in commemoration of the sale, only to topple it over, damaging a showroom vehicle in the process. The dealership employees (presumably not the manager) seemed to take the mishap in stride. You can watch the video here.
A Florida woman was selling teddy bears and got arrested. Why, you ask? Because she had a whip and a pitchfork and was using them to intimidate people into buying! Oh, she also stabbed a minivan with the pitchfork. Closer? You can listen to the short radio segment describing what happened here.

FEATURE

"Taking Action for the Ocean" by World Economic Forum is licensed under CC BY-NC-SA 2.0.

How did Salesforce get so big? Here’s a quick history.

2022 is the 23rd anniversary of Salesforce, the #1 CRM in the world today. The company employs nearly 75,000 people and has a market capitalization of $181 billion.

*record scratch*

You’re probably wondering how they got here. Well, let us tell you the story…

1999-2005

It all started in a rented one-bedroom apartment at 1449 Montgomery Street, on San Francisco’s Telegraph Hill, where Marc Benioff, Parker Harris, Frank Dominguez, and Dave Moellenhoff began working on the very first version of the Salesforce CRM. They wrote their mission statement on the back of an envelope and made “no fluff” their mantra.

In March of 2000, Salesforce gained significant traction when The Wall Street Journal published an article covering the company’s mock protest outside a Siebel Systems conference. They hired actors to carry signs with Salesforce’s tagline: “The End of Software.” The founders of Salesforce wanted to popularize the idea of software as a service – information that could be continuously delivered via the cloud rather than installed and updated on-site only. The David vs. Goliath narrative they created painted them as the virtuous underdogs in the sales software world. That year, they made $5.4 million in revenue; they knew they were onto something.

In 2003, Salesforce filed to go public after making almost $100 million in revenue that fiscal year. And by June of 2004, Salesforce had raised $110 million at $11 per share upon the completion of its initial public offering on the New York Stock Exchange. They were on their way.

2005-2010

Salesforce continued to grow exponentially, innovating new platforms, applications, and programs. Co-founder Marc Benioff has always believed that business is the greatest platform for change. In 2006, he published The Business of Changing the World, which contains essays by 20 thought leaders about how businesses can positively impact society. That same year, the company launched The Power of Us partner program, which introduced Salesforce’s partners to the 1-1-1 philanthropy model – Salesforce gives 1% of its time, product, and financial resources to nonprofits every year.

The following year, the company launched IdeaExchange (now Trailblazer Community), a place for customers to contribute new feature ideas for the platform. They also introduced Force.com, a tech platform which allows developers to build applications on the Salesforce platform and create any user interface they want.

In January 2009, Salesforce reached $1 billion in annual revenue, making it the first cloud computing company to crack a billion dollars. That same year, the Ethisphere Institute named Salesforce one of the world’s most ethical companies for the fourth consecutive year.

2010-2015

By the end of 2011, Salesforce employed 7,785 people around the globe. The following year, Gartner was ranking Salesforce as the leader in their CRM category as the company crossed a threshold of more than 100,000 customers. In 2015, Fortune recognized Salesforce as one of the 10 Best Companies to Work For and one of the World’s Most Admired Software Companies, the same year the company entered the Fortune 500 and opened their tower office in London.

2016-2022

Salesforce continued to open fancy towers, first in New York in 2016, then (and most famously) in San Francisco, where it all began, in 2018. In 2016, the company conducted an equal pay assessment and spent $3 million in salary adjustments for women and people of color in the global workforce.

In 2017, they launched Einstein, the first comprehensive artificial intelligence (AI) technology for CRM. This AI was made accessible to every Salesforce user. In 2018, they launched Salesforce Customer 360, a platform service that efficiently manages customer data across clouds.

And when the pandemic hit in 2020, Salesforce launched a number of products and resources to support companies, such as Salesforce Care, a set of free rapid response solutions; Work.com, a platform with advice, content, data, and new products to help companies reopen their businesses; and Vaccine Cloud, which helped public health authorities, healthcare providers, and nonprofits quickly scale vaccine operations.

*record scratch*

Well, there you have it. A brief history of nearly everything Salesforce. And now that you know how they got there, you might not mind having to update it so much… right?... right?

TAKE THE SALES PRODUCTIVITY QUIZ

Do you know what your sales strengths and weaknesses are?

Our friends at Dooly have created two unique sales tests (one for reps and one for leaders) to help you identify where you excel, and where you could use some work.

Each quiz takes about 3 minutes to complete.
Just answer the questions, and they’ll share a detailed report with you.

For Sales Reps:
Sales Productivity Scorecard

• This quiz will show you the skills and habits you need to become a top performer and hit quota every single time.

For Sales Managers & Leaders:
The Sales Leadership Scorecard

•Take the quiz to uncover blind spots and provide instant, actionable steps on how to improve the performance and morale of your reps...

...then share it with your team and see who gets the highest score!
Our Sales Productivity Score was 32% 🤷‍♂️ Think you can beat us?

MEME OF THE WEEK

Source: Instagram -- Sales Humor

QUIZ

Before turning McDonald’s into a global brand, which product did Ray Kroc sell?

A. Milkshake mixers
B. Coffee brewing equipment
C. Tent supplies
D. Powdered ice cream mix

SALES FAILS

Each week, we bring you the most cringe-worthy sales moments from across the web. To submit your sales fail story for consideration, click here. (Don't worry, you'll remain completely anonymous).

“My first sales job was selling newspaper subscriptions over the phone. It was a lot of cold-calling, and a lot of getting hung-up on, but surprisingly, we used to close a pretty good amount of deals since this was before the internet and newspapers and magazines were a big thing back then.

One day, I was calling a list of people who used to be subscribers but had canceled their subscription. We had a special offer to get them to come back. I reached this guy who picked up the phone and said he would renew the subscription, but said that it was his office number and to call his house and his wife would handle it (he said he would let her know). He said: “Just call and ask for Jessica.”

So I did what he told me, called the home number and asked for Jessica. The woman who picked up the phone was silent for like ten full seconds before she started screaming, “Who is this?! Who is this?!” I told her who it was and that her husband had told me to call. She said something like “Don’t you ever, EVER call here again, you son of a bitch,” and hung up.

I chalked it up to some weird prank and didn’t think about it again until I got a call transferred to me. It was the guy I had originally talked to calling me back to scream at me too. He asked why the hell I had called his wife Jessica, and how did I even know that name, and what right did I have to go intruding in their lives? So I told him that HE was the one who’d given me that name. Then he calmed down and said, “Listen son, I don’t know how old you are, but my advice is to never, ever get married.” Then he hung up and I never heard from either one of them again.

Anonymous Location withheld

GRAPH OF THE WEEK

Source: LinkedIn Poll -- July 2022

WORTH A PEEK

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ASK THE QUOTA

Want to submit a question and be featured in our advice column? Click here. (Don't worry, you'll remain completely anonymous).

Dear Quota Team,

I work for a medical technology company and we work with a specific medical device. I have been at my company for almost three years. I am a top rep (I finished in the top 5% the past two years). I love the product I sell and have made more money here than anywhere I have ever worked. I really enjoy working with our customers and selling what I sell.

The company recently underwent some serious leadership changes, and all three founders were replaced. The new leadership team had communicated that they want honesty, integrity, and open communication. They claim they want the sales team to be able to use their PTO (lol). They seem to be moving in a good direction, however, they recently raised goals and PIP requirements and a lot of people got fired/PIPed out. Obviously, I was unaffected, but what concerns me is that they also created a new arm of our sales department, which is essentially doing our same job, except they don’t need to deal with insurance deals at all – strictly cash, which, as you can imagine, are easier to work/close without all the red tape of insurance.

Here's the problem: the new team's commission structure is different, and in my opinion, worse. It's a draw commission plan and right now that's not how my area is set up. Currently, my area gets paid a very low base (30k/year) with uncapped commission that has tiers up until you hit goal. Anything after goal is paid at the highest tier. I love this system. It's motivating and extremely profitable for me. I made close to 170k last year.

The new kids are on a draw system. Their base pay is 55k and their OTE is the same, however, the way they get there is much different. While my performance is measured by achieving monthly targets, theirs is monthly and quarterly, so it averages out. So basically, they do not have the opportunity to get a fat commission check because if they perform 120% to plan one month, and then 110% the following month in the same quarter, they lose that 10% difference, as in, it gets subtracted from their paycheck.

On the flip side, if someone is not performing well, they owe the company money. This new team was told they would be billed if they did not hit minimum targets. I did the math and it appears that they want to cap commissions at 95k. They are calling this a "pilot program" with the new team, however, there have been signs they’re planning to roll this structure out to our whole sales team.

My question is: since the new leadership has made it clear they want open communication & honesty, should I schedule a meeting and share my thoughts about why I'm not okay with this structure? My hesitation is that, in my experience, all corporate executives are hypocritical liars, and truly full of shit, so it may fall on deaf ears. On the other hand, (and this is what I want to believe), if they mean what they say, they might value my opinion as I have single-handedly brought in almost 2 million dollars for the company. Or should I say nothing and just find another job with a higher OTE? I'm sorry, I know this was long. Thanks for taking the time.

Conflicted in the Midwest

Dear Conflicted,

Oh boy. This was a long one (though we appreciate you writing in). There was a lot to wade through, so we had to call in an expert. Thankfully, we know Ryan Walsh, Founder and CEO of RepVue, who is an expert on sales compensation. He agreed to give us a hand.

Here’s what he said. Firstly, “not all execs are hypocritical liars” (true), but, putting that aside, “This is a very antiquated type of structure, even in an industry that's behind in terms of modern compensation practices (med device).”

So what’s his advice? “I think you should do both, i.e. start looking/start your search NOW, get a few opportunities lined up that look promising AND, once you have a clear path where you could exit with minimal life/income disruption, you should voice your concerns clearly (in the spirit of transparency). Hopefully you'll get more than just lip service but you should be able to read between the lines.”

We agree! Lastly, Ryan adds that he “agrees that it's doubtful they'd maintain two completely separate comp plan types like this,” which means that you’re probably right about them eventually rolling it out to the rest of the team, so make sure to keep that in mind when making your decision. Thanks for writing in and we wish you the best of luck!